Used-Car Auction Houses Accused of Violations

By JACQUES STEINBERG

Published: March 23, 1992

The New York City Commissioner of Consumer Affairs charged eight used-car auction houses yesterday with violating numerous city, state and Federal laws, including barring prospective customers from inspecting cars, selling cars that were unsafe and failing to make necessary repairs on cars before they were bought.

The Commissioner, Mark Green, charged the auction houses with 8,969 violations and accused the houses, which are in Brooklyn, Queens and the Bronx, of acting as "illegal fronts" for used-car dealers.

"Auto auctioneers now know that they can't profit from illegality with impunity," Mr. Green said in a statement. "Car customers should now be educated to better protect themselves when buying auctioned cars."

Mr. Green ordered the auctioneers to appear before the Consumer Affairs Department to answer the charges and said they faced possible fines "of up to $500 per violation and license suspension or revocation."

Mr. Green said his office would also seek a restraining order against Statewide Public Auctions Inc., of 148-22 Archer Avenue in Jamaica, Queens, which he labeled "one of the worst offenders."

In a letter to Statewide last Friday, Mr. Green accused it of auctioning used cars without titles or warranties and of "repeatedly making false and deceptive statements" to buyers about the condition of those cars.

Mark Friedman, a manager at Statewide, said yesterday that he had not received the letter but that the auction house denied any wrongdoing. He said that in its two years of business, Statewide has received no complaints from customers about the quality of its cars. He said the auction house has followed the rules on warranties outlined in the state's used-car "lemon" law and has assured that all its cars have been inspected by the state before purchase.